Croydon London Borough Council v Kalonga

Factual and Procedural Background

The Appellant Local Authority granted the Respondent a five-year flexible secure tenancy of a residential property commencing on 25 May 2015. On 2 August 2017, the Appellant served a statutory notice alleging rent arrears and anti-social behaviour and began possession proceedings without first invoking any contractual right of forfeiture.

During the High Court trial of preliminary issues before Judge Tipples, the parties proceeded on assumed facts. While judgment was reserved, the fixed term expired on 24 May 2020 and a statutory periodic “follow-on” tenancy arose. Judge Tipples dismissed the possession claim and issued declarations adverse to the Appellant.

The Court of Appeal (Judge King, Judge Asplin and Judge Arnold) upheld that decision, holding that a fixed-term secure tenancy may be terminated early only by a forfeiture-based termination order under section 82(3) of the Housing Act 1985. The Appellant obtained permission to appeal to the Supreme Court to clarify the operation of the statutory scheme.

Legal Issues Presented

1. Whether, under the Housing Act 1985, a landlord can end a secure fixed-term tenancy before expiry merely by obtaining a statutory possession order, or whether it must first invoke a contractual forfeiture provision and obtain a termination order under section 82(3).
2. Whether the Respondent’s tenancy agreement contained any clause amounting in substance to a right of forfeiture.

Arguments of the Parties

Appellant’s Arguments

• The phrase “subject to termination by the landlord” in section 82(1)(b) encompasses any contractual mechanism for early termination, not just forfeiture.
• Section 82(1A) offers a “menu” of routes; the landlord may choose between a possession order, a termination order in lieu of forfeiture, or (after 2003) a demotion order.
• Insisting on forfeiture would render section 82(1A) largely redundant and deprive landlords of essential estate-management tools such as redevelopment (Ground 10) even where break clauses exist.
• Losing the opportunity for relief from forfeiture is balanced by the statutory requirement of reasonableness on default grounds (Grounds 1–8).

Respondent’s Arguments

• “Subject to termination by the landlord” in section 82(1)(b) refers only to forfeiture; therefore a fixed-term tenancy can be ended early solely via a section 82(3) termination order.
• Alternatively, every contractual mechanism for early termination should be treated as a forfeiture provision, preserving the tenant’s right to seek relief.
• Reading section 82 otherwise would gut the additional security Parliament intended to confer and contradict the statement contained in the Secure Tenancies (Notices) Regulations 1987.
• The Respondent’s tenancy agreement contained no true forfeiture clause, so the Appellant lacked any gateway to terminate the fixed term prematurely.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Briggs, delivering the unanimous opinion, held that Parliament did not intend the secure-tenancy regime to erode contractual security inherent in fixed-term tenancies unless the landlord’s contractual right to terminate had actually become exercisable. The analytical steps were:

• Section 82(1) is prohibitory: it prevents a landlord from exercising an existing contractual right to terminate except through the statutory routes; it does not confer new termination rights.
• A tenancy is “subject to termination by the landlord” only when the relevant contractual condition (forfeiture or break clause) is currently exercisable. Mere inclusion of such a clause is insufficient.
• Where the only exercisable mechanism is forfeiture, the landlord must pursue a termination order under section 82(3), complying with section 146 LPA 1925 and preserving the tenant’s right to relief.
• If a non-default break clause has matured (e.g., after a specified date), the tenancy becomes “subject to termination” and the landlord may then seek possession on any applicable statutory ground.
• This interpretation reconciles statutory language, preserves meaningful distinctions between fixed-term and periodic secure tenancies, and aligns with long-standing regulatory guidance.
• Applying the Clays Lane definition, the Respondent’s tenancy contained multiple forfeiture provisions because the landlord could obtain possession “at any time” for breach. Consequently, relief from forfeiture had to remain available.
• The Appellant had expressly declined to pursue forfeiture; therefore, at the relevant time the tenancy was not “subject to termination” within section 82(1)(b), and the possession claim was bound to fail.

Holding and Implications

Appeal allowed in part. The Supreme Court upheld dismissal of the possession claim but disagreed with the lower courts on two points: (1) the Respondent’s agreement did contain forfeiture clauses in substance, and (2) forfeiture is not the sole statutory route for early termination—possession may be sought once any contractual right to terminate has become exercisable. The Court invited further submissions on the precise form of declaratory relief.

Implications: The judgment clarifies that fixed-term secure tenants retain the contractual security of their term unless and until the landlord’s contractual right to terminate (forfeiture or break clause) has matured. Landlords must align statutory grounds with live contractual rights, and forfeiture routes continue to attract the tenant’s right to seek relief. The decision provides guidance for local authorities and social landlords nationwide but does not create new statutory rights.